Pennsylvania American Water customers will see smaller rate increases than the utility originally requested after the Pennsylvania Public Utility Commission approved a modified rate plan Thursday that cuts the company’s proposed revenue increase by more than half while requiring a series of customer service and consumer protection improvements.
The PUC voted 4-1 to approve the changes, which include an overall annual revenue increase of $74.9 million. The approved increase consists of $45.3 million, or about 4.75%, for the company’s water operations and $29.6 million, or about 14.17%, for its wastewater operations. The new rates will take effect Aug. 13.
Pennsylvania American Water had sought significantly higher increases, requesting more than $143.4 million, or approximately 15%, for water service and more than $16.1 million, or about 7.7%, for wastewater service.
The utility provides water and wastewater service to approximately 810,000 customers across portions of 38 Pennsylvania counties. Its last base rate increase was filed in 2023.
In addition to approving reduced rate increases, the commission directed Pennsylvania American Water to implement several changes aimed at improving customer assistance and service.
By Nov. 11, the company must modify its Bill Discount Program by identifying low-income customers during enrollment, directing eligible customers to assistance programs before entering deferred payment plans or facing service disconnection, and offering qualified customers the opportunity to enroll in both its Bill Discount and Arrearage Management programs.
The commission also ordered changes to the Arrearage Management Program, including allowing customers to receive monthly debt forgiveness credits for every completed payment regardless of whether it is made on time, increasing monthly forgiveness credits from $25 to $40 for qualifying payments, and providing full arrearage forgiveness after 24 months in the program.
Pennsylvania American Water must also enhance screening and outreach for its H2O Help to Others Program by Nov. 11.
The order includes additional customer service requirements, including an audit of the company’s third-party call centers that handle collection calls to ensure compliance with PUC regulations. The audit results must be shared with stakeholders and included in the utility’s next base rate case.
The company must also work with an independent third party to analyze customer disputes and complaints to identify trends, determine underlying causes, and develop reforms. The findings will also be included in its next rate case.
Within 90 days, Pennsylvania American Water must revise residential customer bills to clearly state that American Water Resources is not affiliated with Pennsylvania American Water Company.
The commission also acknowledged the company’s role in acquiring and operating troubled water and wastewater systems throughout Pennsylvania, noting that it has acquired 14 such systems over the past decade.
A final opinion and order detailing all of the commission’s decisions is expected to be released in the coming days.
